MANELLA, J.
Appellant Kenji Kato challenges the trial court's confirmation of an arbitration award in favor of respondents Level 7, LLC (Level 7), and The Management Company, LLC (Management). We affirm.
In March 2005, Kato executed contracts with respondents styled as "independent contractor" agreements. Kato's agreement contract with Level 7 provided that he was to be paid $100 per hour for his "[b]usiness [d]evelopment, [m]anagement, [p]roduction and [c]onsulting [s]ervices," and obliged him to refrain from disclosing information on enumerated matters. Under the contract, "[a]ny dispute or controversy arising under, relating to, or concerning [the contract]" was to be settled by "final and binding arbitration" under the commercial arbitration rules of the American Arbitration Association (AAA); in any such action, the prevailing party was entitled to its attorney fees and costs. The contract also stated: "In the event that any provision of this Agreement is determined to be invalid or unenforceable by any court or arbitrator of competent jurisdiction, such determination shall in no way affect or limit the validity or enforceability of the remainder of this Agreement." Kato's agreement with Management contained materially similar provisions, including an identical arbitration clause.
On November 13, 2006, respondents filed an action for injunctive and declaratory relief against Kato in Orange County Superior Court. The complaint alleged that when respondents terminated the 2005 agreements, Kato threatened to disclose information in breach of the contracts' confidentiality provisions. Respondents also obtained a temporary restraining order barring Kato from publishing specified information concerning any individual affiliated with respondents.
On November 27, 2006, Kato initiated the underlying action against respondents, together with Henry T. Nicholas III and several other parties.
In March 2007, respondents filed a petition for an order compelling Kato to submit his claims against them to arbitration, pursuant to the 2005 agreements. On May 21, 2007, the trial court granted the petition, and the matter was submitted to arbitration before a three-member panel of arbitrators. Before the principal evidentiary hearing, the arbitrators permitted Kato to assert supplemental claims based on the 2005 agreements for breach of contract, quantum meruit, and declaratory relief. The arbitrators also granted respondents' motions to dismiss Kato's claims in the FAC for breach of the settlement agreement, abuse of process, malicious prosecution, and infliction of emotional distress.
On August 12, 2009, following a seven-day evidentiary hearing on Kato's remaining claims, the arbitrators issued their interim award. The arbitrators found that Kato had failed to prove his claim in the FAC for slander per se. Regarding Kato's supplemental claims, the arbitrators found that Kato was entitled to relief in the form of the following declaration: "The [2005 a]greements which [Kato] signed . . . are void and unenforceable, except as to the agreed upon hourly rate therein. [Kato] was an `employee' . . ., not an independent contractor, at all times relevant." The arbitrators also determined that Kato was entitled to unpaid compensation under the 2005 agreements, and reserved the ultimate determination of Kato's damages for their final award.
Kato sought clarification or correction of the interim award, contending that the arbitrators, in finding that the 2005 agreements were void "except as to the agreed upon hourly rate," divested themselves of jurisdiction to adjudicate the slander claim. In addition, Kato sought civil penalties for unpaid compensation pursuant to Labor Code section 203; requested leave to assert new claims against Nicholas, including a claim for double recovery of his unpaid compensation under Labor Code section 972; and asked the arbitrators to determine whether respondents were Nicholas's alter ego.
On October 31, 2009, the arbitrators issued their final award, which incorporated the interim award and contained additional findings regarding compensatory damages and attorney fees. In rejecting Kato's request for clarification or modification of the interim award, the arbitrators declined to withdraw their findings regarding his slander claim. In addition, they denied Kato leave to assert new claims under the Labor Code, stating that "these issues were never alleged, no evidence was introduced to support their applicability, and no argument was received on [them]." The arbitrators also stated that they lacked jurisdiction to determine whether respondents were Nicholas's alter egos because Nicholas was not a party to the arbitration.
Turning to damages and attorney fees, the arbitrators found that Kato was entitled to $164,579.35 in unpaid compensation and interest. They also found that there was no prevailing party, reasoning that Kato had not established his slander claim, and that respondents had submitted little or no evidence in opposition to Kato's claims for unpaid compensation. In view of this determination, the arbitrators required each side to bear its own attorney fees and costs; moreover, they ordered each side to pay equal shares of the arbitration costs, which respondents had borne in the course of the proceedings. The arbitration costs totaled $339,725.70, and the arbitrators directed Kato to reimburse respondents $161,862.85.
When Kato filed a petition to correct or vacate the final award, respondents opposed the petition and asked the trial court to confirm the award. Following a hearing, the trial court confirmed the award and denied the petition to correct or vacate. On April 2, 2010, Kato noticed his appeal from these orders. On April 5, 2010, judgment was entered on Kato's claims against respondents (as asserted in the FAC and in arbitration).
Kato contends that the trial court improperly confirmed the award.
To enforce the finality of arbitration, the statutes governing nonjudicial arbitration awards minimize judicial intervention. (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 10 (Moncharsh).) Once a petition to confirm an award is filed, the superior court has only four courses of conduct: to confirm the award, to correct and confirm it, to vacate it, or to dismiss the petition. (United Brotherhood of Carpenters etc., Local 642 v. DeMello (1972) 22 Cal.App.3d 838, 840; 6 Witkin, Cal. Procedure (5th ed. 2008) Proceedings Without Trial, § 566, pp. 1071-1072.) The trial court is empowered to correct or vacate the award, or dismiss the petition, upon the grounds set out in the pertinent statutes; "[o]therwise courts may not interfere with arbitration awards." (Santa Clara-San Benito etc. Elec. Contractors' Assn. v. Local Union No. 332 (1974) 40 Cal.App.3d 431, 437; see also Moncharsh, supra, 3 Cal.4th at pp. 10-13.)
In seeking to vacate or correct the award and opposing its confirmation, Kato contended that the arbitrators "exceeded [their] powers" (1) by continuing to make rulings after they found that the 2005 agreements were unenforceable, and (2) by denying his request for attorney fees and costs (Code Civ. Proc., §§ 1286.2, subd. (a)(4), 1286.6, subd. (a)). Kato also maintained that the arbitrators improperly refused to "hear evidence material to the controversy" by permitting Nicholas to exercise his privilege against self-incrimination during the arbitration (Code Civ. Proc., § 1286.2, subd. (a)(5)). Kato further asked that the award be corrected "to uphold all supporting facts" regarding the following matters: the unenforceability of the 2005 agreement, the propriety of a fee award to Kato, and Kato's status as Nicholas's employee (Code Civ. Proc., § 1286.6, subd. (c)).
We subject the trial court's rulings and the underlying award to different standards of review. To the extent the trial court made findings of fact in confirming the award, we affirm the findings if they are supported by substantial evidence. (Turner v. Cox (1961) 196 Cal.App.2d 596, 603.) To the extent the trial court resolved questions of law on undisputed facts, we review the trial court's ruling de novo. (Advanced Micro Devices, Inc. v. Intel Corp. (1994) 9 Cal.4th 362, 376, fn. 9.)
We apply a highly deferential standard of review to the award itself, insofar as our inquiry encompasses the arbitrators' resolution of questions of law or fact. Because the finality of arbitration awards is rooted in the parties' agreement to bypass the judicial system, "it is the general rule that, `The merits of the controversy between the parties are not subject to judicial review.' [Citations.]" (Moncharsh, supra, 3 Cal.4th at p. 11.)
Under this rule, courts will not review the arbitrator's reasoning or the sufficiency of the evidence supporting the award. (Moncharsh, supra, 3 Cal.4th at pp. 10-11.) Moreover, absent "narrow exceptions" discussed further below (see pt. B., post), "an arbitrator's decision cannot be reviewed for errors of fact or law." (Id. at p. 11.) These exceptions do not encompass errors that are apparent on the face of the award and cause substantial injustice. (Id. at p. 32.) Circumstances justifying judicial review arise when "the underlying contract or transaction was illegal in its entirety"; when the award contravenes "an explicit legislative expression of public policy" or a party's unwaivable rights; or when the arbitrators impose a remedy not authorized by the arbitration agreement. (Cotchett, Pitre & McCarthy v. Universal Paragon Corp. (2010) 187 Cal.App.4th 1405, 1416-1417 & fn. 1; Advanced Micro Devices, Inc. v. Intel Corp., supra, 9 Cal.4th at p. 375.)
Kato contends that the arbitration provisions of the 2005 agreements were unenforceable because the arbitrators correctly found that the 2005 agreements were void and unenforceable in their entirety.
The key principles governing our examination of Kato's contention are stated in Moncharsh and its progeny. In Moncharsh, an attorney's employment agreement with his law firm required the parties to arbitrate disputes arising under the agreement in accordance with AAA rules. (Moncharsh, supra, 3 Cal.4th at pp. 6-7 & fn 1.) After the attorney terminated his employment, he asserted claims for unpaid compensation, which were submitted to arbitration. (Ibid.) During the arbitration, the attorney maintained that certain fee provisions of the employment agreement were unenforceable. (Ibid.) Following the arbitration, the attorney opposed confirmation of the award, contending that the arbitrator erred in determining that the material provisions of the employment agreement were enforceable against the attorney. (Id. at p. 8.)
In clarifying the extent to which courts may review an award, our Supreme Court concluded that the statutes governing contract-based arbitration "require[] enforcement of the arbitration agreement unless there exist grounds for revocation of that agreement." (Moncharsh, supra, 3 Cal.4th at p. 29, italics omitted.) The court explained: "If a contract includes an arbitration agreement, and grounds exist to revoke the entire contract, such grounds would also vitiate the arbitration agreement. Thus, if an otherwise enforceable arbitration agreement is contained in an illegal contract, a party may avoid arbitration altogether. [Citations.] [¶] By contrast, when . . . the alleged illegality goes to only a portion of the contract (that does not include the arbitration agreement), the entire controversy, including the issue of illegality, remains arbitrable. [Citations]." (Id. at pp. 29-30; see also Duffens v. Valenti (2008) 161 Cal.App.4th 434, 454 ["Where an alleged illegality goes to only a portion of the contract, not including an arbitration agreement, a court will be justified in ruling that the entire controversy, including the issue of illegality, remains arbitrable."].)
As elaborated in Moncharsh and other cases, the claimed illegality in the contract determines the scope of judicial review. When the purported illegality inextricably encompasses the arbitration provision, the question is one for the courts, not the arbitrator, to decide. (Hotels Nevada, LLC v. Bridge Banc, LLC (2005) 130 Cal.App.4th 1431, 1436; Lindenstadt v. Staff Builders, Inc. (1997) 55 Cal.App.4th 882, 892-893.) In such cases, the arbitrator's determination regarding illegality is not binding on the trial court, which is "`the tribunal which must determine such issue of illegality upon the evidence presented to it.'" (Id. at p. 892, quoting Loving & Evans v. Blick (1949) 33 Cal.2d 603, 614.) In contrast, when the purported illegality does not encompass the arbitration provision, the arbitrator's determination is subject to judicial review only in "limited and exceptional circumstances," for example, when "granting finality to an arbitrator's decision would be inconsistent with the protection of a party's statutory rights." (Moncharsh, supra, 3 Cal.4th at p. 32.)
In view of these principles, we conclude that Kato's contention fails.
To the extent Kato maintains that the arbitration provisions of the 2005 agreements must be regarded as unenforceable because the arbitrators found that the 2005 agreements were wholly void or illegal, the trial court properly determined that the arbitrators made no such finding (see pt. B.2.a., post). Moreover, even had the arbitrators found the 2005 agreements to be illegal in their entirety, this finding would not have been binding on the trial court. As explained below (see pts. B.2.a. & B.2.b., post), neither Kato's pleadings before the trial court nor his briefs on appeal establish that the arbitration provisions are unenforceable because the 2005 agreements are illegal or for any other reason.
We begin by examining the proceedings before the arbitrators and the trial court's confirmation of the arbitration award. Before the trial court, Kato opposed confirmation of the final award solely on the ground that arbitrators had found that the 2005 agreements were void; he otherwise offered no substantive argument to establish the illegality of the 2005 agreements.
The limited record before us discloses the following facts: During the arbitration, Kato sought a declaration that the 2005 agreements were "void and unenforceable, except as to the agreed upon hourly rate therein," and that he had been an employee at relevant times. Kato maintained that the 2005 agreements were void or voidable because he was an employee; he further alleged that respondents had used the agreements to conceal his status as an employee. The arbitrators' interim award found that Kato was an employee, not an independent contractor, under the established criteria for distinguishing the two statuses (see S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341, 350); in addition, the award concluded that Kato was entitled to the declaratory relief he sought. Kato asked the arbitrators to clarify or correct the interim award, asserting that the declaratory relief removed the arbitrators' jurisdiction to adjudicate his slander claim. The arbitrators denied his motion, reasoning that it amounted to an improper request "to strike" their ruling on the slander claim, as the interim award was "final as to those matters it decided."
Before the trial court, Kato opposed confirmation of the final award on the ground that the arbitrators had found that the 2005 agreements were void. In rejecting this contention, the trial court noted that the 2005 agreements contained a severability clause, and that AAA Commercial Rule R-7(b) provides: "The arbitrator shall have the power to determine the existence or validity of a contract of which an arbitration clause forms a part. Such an arbitration clause shall be treated as an agreement independent of the other terms of the contract. A decision by the arbitrator that the contract is null and void shall not for that reason alone render invalid the arbitration clause." Pointing to the severability clause and the AAA rule, the trial court concluded that the arbitrators had not acted in excess of their jurisdiction in issuing the final award, notwithstanding the declaratory relief contained in the interim award. In ruling, the trial court remarked that the arbitrators had "impliedly severed [the arbitration clauses] out."
We see no error in the trial court's ruling. Before the trial court, Kato relied solely on the arbitrators' findings in the interim award to establish that the arbitration provisions were unenforceable. However, as the trial court noted, Kato had already asserted this contention to the arbitrators, who rejected it before they issued the final award. Generally, arbitrators may issue an interim award in the course of deciding the issues submitted to them. (Roehl v. Ritchie (2007) 147 Cal.App.4th 338, 351; Hightower v. Superior Court (2001) 86 Cal.App.4th 1415, 1434.) Although the arbitrators have no power to use this process "to correct or modify the terms of an original award," the courts apply a deferential standard of review to the arbitrators' determinations regarding their contractual power to render a subsequent award, and "resolve any doubts in favor of upholding the second arbitration award." (Roehl v. Ritchie, supra, at pp. 350-351.)
Under this standard, the trial court properly concluded that the arbitrators had not acted in excess of their jurisdiction in issuing the final award. In awarding declaratory relief, the arbitrators did not find that the 2005 agreements were entirely void or illegal, as the relief expressly excepted "the agreed upon hourly rate therein." Moreover, nothing in the record suggests that Kato, in seeking the declaratory relief, challenged the 2005 agreements in their entirety, as the arbitrators' findings regarding his challenge focused on the provisions in the 2005 agreements related to his status as an independent contractor. Accordingly, there is substantial evidence to support the trial court's determination that the declaratory relief did not render the arbitration clauses unenforceable. (See Bayscene Resident Negotiators v. Bayscene MobileHome Park (1993) 15 Cal.App.4th 119, 124-125 [trial court properly declined to correct arbitration award because there was substantial evidence to support its interpretation of ambiguous provision in award].)
On appeal, Kato has supplemented his contention before the trial court with additional arguments regarding the unenforceability of the arbitration clauses in the 2005 agreements. As he never raised these arguments before the arbitrators or the trial court, he has failed to preserve them for appeal. (Pearson Dental Supplies, Inc. v. Superior Court (2010) 48 Cal.4th 665, 681.) Moreover, were we to address them on the merits, we would conclude they fail.
Kato's principal contention is that the 2005 agreements were illegal because they misclassified Kato as an independent contractor, and thereby operated to deny him statutory rights as an employee. Because this contention hinges on Kato's assertion that respondents "were proven to have intentionally misclassified [him] as an independent contractor," Kato effectively maintains that the 2005 agreements were rendered void by fraud. He is mistaken.
Only limited forms of contract-related fraud bar enforcement of an arbitration clause within the contract. Generally, California law distinguishes "fraud in the execution," in which a party is deceived that a contract is being created, from "fraud in the `inducement,'" in which the party is aware that he or she is executing a contract, but is deceived regarding its provisions. (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 415 (Rosenthal), italics omitted.)
Kato also suggests that the arbitration clauses are unenforceable as unconscionable. Enforcement of an arbitration clause in an employment agreement is unconscionable when (1) the agreement is a contract of adhesion, and (2) the arbitration clause displays sufficient "procedural" and "substantive" unconscionability. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 113-121 (Armendariz).) Procedural unconscionability concerns the manner in which the agreement was negotiated, and arises when there is "oppression" (an unfair application of bargaining power) or "surprise" (hidden or undisclosed material terms). (Abramson v. Juniper Networks, Inc. (2004) 115 Cal.App.4th 638, 656.) Substantive unconscionability "focuses on the terms of the agreement and whether those terms are `so one-sided as to "shock the conscience."' [Citations.]" (Kinney v. United HealthCare Services, Inc. (1999) 70 Cal.App.4th 1322, 1328, italics deleted.) Kato maintains that the 2005 agreements were contracts of adhesion, that the arbitration clauses were "buried" in the 2005 agreements, and that he never received a copy of the AAA rules; he also argues that the clauses operated to his disadvantage, pointing to adverse rulings by the arbitrators regarding his requests for statutory penalties and damages, and regarding attorney fees and costs.
This contention fails for want of a showing of procedural unconscionability. "Both procedural and substantive unconscionability must be present before a court can refuse to enforce an arbitration provision based on unconscionability." (O'Hare v. Municipal Resource Consultants (2003) 107 Cal.App.4th 267, 273.)
Here, the arbitration clause is not hidden in the 2005 agreements, as it is contained in a separate section entitled "Confidential Binding Arbitration" and is printed in the same font used throughout the agreement. Kato's remaining assertions regarding the negotiation of the 2005 agreements are not established by his citations to the record. (Grant-Burton v. Covenant Care, Inc. (2002) 99 Cal.App.4th 1361, 1379 [appellate courts may properly disregard factual contentions not supported by adequate citations to record].) Accordingly, Kato has failed to show that enforcement of the arbitration clauses would be unconscionable.
Kato contends that the trial court erred in confirming the award because it improperly denied him unwaivable rights. For the reasons explained below, we disagree.
Generally, employers cannot require their employees to waive various rights grounded in public policy. (Armendariz, supra, 24 Cal.4th at pp. 99-100; Littlev. Auto Stiegler, Inc. (2003) 29 Cal.4th 1064, 1081-1085 (Little).) These include certain statutory rights under the California Fair Employment and Housing Act (Gov. Code, § 12900 et seq.) (FEHA) and the Labor Code (Armendariz, supra, at pp. 101; Gentry v. Superior Court (2007) 42 Cal.4th 443, 455), as well as the nonstatutory rights implicated in "Tameny claims," that is, claims for wrongful discharge in violation of public policy (Little, supra, at pp. 1076, 1081-1085). Although claims arising from such rights are subject to arbitration (Boghos v. Certain Underwriters at Lloyd's of London (2005) 36 Cal.4th 495, 506-508), an arbitrator's rulings regarding unwaivable rights are exempt from the deferential standard of review ordinarily applied to arbitration awards. (See Pearson Dental Supplies, Inc. v. Superior Court, supra, 48 Cal.4th at pp. 679-680 [addressing unwaivable statutory rights of employees].)
Kato contends that the arbitrators improperly denied his claims for statutory penalties and double damages under Labor Code sections 203 and 972, which he characterizes as claims involving unwaivable rights. However, he has forfeited this contention, as it was never submitted to the trial court: his pleadings in opposition to confirmation of the award make no reference to Labor Code sections 203 and 972. (Evans, supra, 134 Cal.App.4th at pp. 160-161.) Moreover, we would conclude that the contention fails were we to consider it on the merits. Assuming — without deciding — that Kato's Labor Code claims implicate unwaivable rights, he raised the claims only after the arbitrators had conducted the evidentiary hearing and issued their interim award, which addressed all of Kato's then-unresolved claims in the arbitration. The arbitrators denied Kato leave to allege new claims under Labor Code sections 203 and 972, reasoning that the statutes "were never alleged, no evidence was introduced to support their applicability, and no argument was received on [them]." We see no error in this ruling regarding Kato's belated Labor Code claims. (See 5 Witkin, Cal. Procedure (5th ed. 2008) Pleading, § 1206, pp. 639-640 [after presentation of evidence is complete, trial court may properly reject amendments to complaint that require taking of new evidence].)
Kato contends that the arbitrators improperly denied his request for an award of fees and costs. We disagree. Following an assessment of the parties' measure of success in the arbitration, the arbitrators concluded there was no prevailing party, and directed each side to bear its own fees and costs. Kato maintains that the arbitrators, in determining that there was no prevailing party, erred in interpreting the fee provisions in the 2005 agreements and in applying Civil Code section 1717. We conclude that the arbitrators' determinations on these matters are beyond the scope of judicial review, as they were consigned to the arbitrators under the broad arbitration clauses in the 2005 agreements. (Moore v. First Bank of San Luis Obispo (2000) 22 Cal.4th 782, 786.)
Kato's reliance on DiMarco v. Chaney (1995) 31 Cal.App.4th 1809 is misplaced. There, the arbitrator found that a participant was the prevailing party, but denied the participant's request for a fee award, even though the underlying arbitration agreement provided that "the prevailing party shall be entitled" to a fee award. (Id. at pp. 1814-1815, italics omitted.) The appellate court concluded that the arbitrator had exceeded his authority under the agreement, which mandated a fee award under the circumstances. (Ibid.) That is not the case here, as the arbitrators found that neither side had prevailed.
Kato challenges the arbitrators' rulings regarding Nicholas, who participated in the arbitration as a witness. Kato contends that the arbitrators erred (1) in declining to determine whether respondents were his alter egos, and (2) in permitting Nicholas to assert his privilege against self-incrimination under the California and United States Constitutions. Both contentions are mistaken.
We begin with the arbitrators' determination that they lacked jurisdiction to examine the alleged alter ego relationship between respondents and Nicholas. Generally, "a nonsignatory [to an arbitration agreement] cannot be made a party to an arbitration absent an initial factual determination by a trial court regarding the nonsignatory's status." (American Builder's Assn. v. Au-Yang (1990) 226 Cal.App.3d 170, 178.) Thus, "[t]he question of whether a nonsignatory is a party to an arbitration agreement is one for the trial court in the first instance." (Id. at p. 179.) In view of this principle, the existence of an alter ego relationship between the nonsignatory and parties to the arbitration agreement is properly consigned to the trial court, not the arbitrator. (Retail Clerks Union v. L. Bloom Sons Co. (1959) 173 Cal.App.2d 701, 703-704 [applying California arbitration law]; Carpenters 46 No. Cal. Counties Conf. Bd. v. Zcon Builders (9th Cir. 1996) 96 F.3d 410, 414-415 [applying federal arbitration law].)
Here, it is undisputed that Nicholas was not a signatory to the 2005 agreements. However, when respondents sought to compel arbitration, Kato did not ask the trial court to rule whether Nicholas should participate in the arbitration due to an alter ego relationship; Kato first presented this question to the arbitrators. Accordingly, the arbitrators properly declined to resolve it.
We turn next to Kato's contention that because the arbitrators permitted Nicholas to assert his privilege against self-incrimination when he testified, they improperly refused to "hear evidence material to the controversy" (Code Civ. Proc., § 1286.2, subd. (a)(5)). We see no error in the arbitrators' rulings. Evidence Code section 940 states: "To the extent that such privilege exists under the Constitution of the United States or the State of California, a person has a privilege to refuse to disclose any matter that may tend to incriminate him." Evidence Code section 910 provides that section 940 applies in all proceedings, and adds: "The provisions of any statute making rules of evidence inapplicable in particular proceedings, or limiting the applicability of rules of evidence in particular proceedings, do not make this division [including section 940] inapplicable to such proceedings." The arbitrators were thus authorized to honor Nicholas's invocation of his privilege against self-incrimination, even though the arbitration statutes state that the "rules of evidence . . . need not be observed" in arbitrations (Code Civ. Proc., § 1282.2, subd. (d)).
Kato's contention also fails for want of an adequate showing of prejudice. Generally, a party seeking to vacate an arbitration award "must show substantial prejudice." (United Brotherhood of Carpenters etc., Local 642 v. DeMello, supra, 22 Cal.App.3d at p. 840.) To establish substantial prejudice from a refusal to hear evidence, the party seeking to vacate the award must make a showing that the arbitrator prevented the party from presenting a potentially meritorious argument or defense. (Pacific Vegetable Oil Corp. v. C.S.T., Ltd. (1946) 29 Cal.2d 228, 240-241.) Moreover, the refusal to hear evidence is substantially prejudicial only if "the arbitrator might well have made a different award had the evidence been allowed." (Hall v. Superior Court (1993) 18 Cal.App.4th 427, 439.)
Kato has neither explained how Nicholas's invocation of the privilege denied him an opportunity to advance a meritorious position nor shown that he was likely to have obtained a more favorable award had Nicholas provided more informative testimony. As appellant, Kato is obliged to provide a record that demonstrates reversible error. (See Maria P. v. Riles (1987) 43 Cal.3d 1281, 1295.) Here, the limited record before us lacks a full transcript of the proceedings before the arbitrators. Kato's briefs contain no argument (with citations to the record) setting forth how Nicholas's invocation of his privilege against self-incrimination materially impaired Kato's ability to prevail on a meritorious claim or defense. Accordingly, Kato has failed to show that the arbitrators improperly refused to hear material testimony.
Kato contends that the arbitrators improperly denied him an opportunity to present certain claims in the arbitration. He argues that they incorrectly ruled that his claim in the FAC for breach of the alleged September 2006 oral settlement agreement was untimely under the applicable statute of limitations. In addition, he argues that they improperly denied him leave to assert a slander claim predicated on facts that occurred after he filed the FAC. As Kato never challenged these rulings before the trial court, he has failed to preserve his contentions of error for appeal. Moreover, because we do not examine the arbitrators' award for errors of fact or law, his contentions fall outside the scope of judicial review. (Moncharsh, supra, 3 Cal.4th at p. 11.)
The judgment is affirmed. Respondents are awarded their costs on appeal.
We concur:
WILLHITE, Acting P. J.
SUZUKAWA, J.
